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Talking Points:
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US Dollar Follow-Through on ADP, ISM Data Outcomes May Prove Limited
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British Pound May Ignore Upside Surprise on UK Service-Sector PMI Data
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The economic calendar is relatively quiet in European hours. February’s UK Services PMI reading headlines the docket, with expectations pointing to a slight acceleration in sector activity growth. An upside surprise may be in the cards considering UK news-flow has tended to outperform relative to consensus forecasts over recent weeks. That may not mean much for the British Pound however. Indeed, prices broadly similar outcomes on Manufacturing and Construction PMIs earlier in the week.
Later in the day, the spotlight turns to a busy US data docket. The ADP Employment report is expected to show a 219,000 increase in payrolls in February, marking a narrow improvement from the 213,000 gain in the prior month. Separately, the ISM Non-Manufacturing Composite gauge is forecast to reflect a narrow slowdown in service-sector activity. Finally, the Federal Reserve will release its Beige Book survey of regional economic conditions.
Broadly speaking, realized US data outcomes have increasingly underperformed relative to expected results since late January. That suggests analysts continue to overestimate the vigor of the world’s largest economy and opens the door for further disappointments. Such results may pour cold water on Fed rate hike speculation and weigh on the US Dollar. Follow-through may be limited however as investors wait for the release of Friday’s much-anticipated US Employment report before showing directional commitment.
Currency markets were locked in consolidation mode overnight, with most of the majors oscillating nearly flat on the session. The Japanese Yen narrowly outperformed, adding as much as 0.2 percent on average against its top counterparts. The move tracked a decline on the benchmark Nikkei 225 stock index, pointing to risk aversion as the catalyst behind the advance of the safety-linked currency.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
| 21:45 | NZD | Value of All Buildings (QoQ) (4Q) | 0.3% | 1.0% | 1.1% |
| 22:30 | AUD | AiG Performance of Service Index (FEB) | 51.7 | - | 49.9 |
| 0:01 | GBP | BRC Shop Price Index (YoY) (FEB) | -1.7% | -1.2% | -1.3% |
| 0:30 | AUD | GDP (QoQ) (4Q) | 0.5% | 0.6% | 0.4% |
| 0:30 | AUD | GDP (YoY) (4Q) | 2.5% | 2.5% | 2.7% |
| 1:35 | JPY | Markit/JMMA Composite PMI (FEB) | 50.0 | - | 51.7 |
| 1:35 | JPY | Markit Services PMI (FEB) | 48.5 | - | 51.3 |
European Session